Lineage Cell Therapeutics, Inc.

Welcome to the LineageStyle Therapeutics 3rd Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the Investors section of Lineage's website at www.lineagestyle.com. This call is subject to copyright and is the property of Lineage. And recordings, reproductions, or transmissions of this call without the express written consent of Lineage are strictly prohibited. As a reminder, today's call is being recorded. I would now like to introduce your host for today's call, Iwana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.

Thank you, Jordan. Good afternoon, and thank you for joining us. A press release reporting our third quarter 2023 financial results was issued earlier today, November 9th, 2023, and can be found on the investor section of our website. Please note that today's remarks and responses to your questions reflect management's views as of today only and will contain forward-looking statements within the meaning of federal securities laws. Statements made during this discussion that are not statements of historical fact should be considered forward-looking statements, which are subject to significant risks and uncertainties. The company's actual results or performance may differ materially from the expectations indicated by such forward-looking statements. For a discussion of certain factors that could cause the company's results or performance to differ, we refer you to the forward-looking statements section in today's press release and in the company's SEC filings, including its most recent annual report on Form 10-K and its subsequent quarterly reports on Form 10-Q. We caution you not to place undue reliance on any forward-looking statements which speak only as of today and are qualified by the cautionary statements and risk factors described in our SEC filings. With us today are Brian Culley, our Chief Executive Officer, Jill Howe, our Chief Financial Officer, and Gary Hogue, our Senior Vice President of Clinical and Medical Affairs. With that, I'd like to turn the call over to Brian.

Thank you, Ioana. Good afternoon, everyone. We appreciate you taking the time to join us today. I'm pleased to report that everything remains on track with our most important development plans, and we continue to have many reasons to be excited about the future. For example, we recently reached a milestone with the ANP1 program for hearing loss, which I look forward to describing further today. But first, I want to start off by talking about our manufacturing subsidiary, because it is located in Israel, and the work performed by that group is very important to us. We have more than 50 employees in Israel, and naturally, the safety and well-being of that team is our top priority. There's been almost no impact on our operations due to the Israel Hamas war. Our facility itself is located in a suburban area, approximately 30 minutes outside of Jerusalem, and it has not been directly impacted by the ongoing conflict. We have an extremely capable and dedicated team, and while a small number of employees or spouses were called up for reserve duty, the team has continued to maintain their high level of output in particular by completing the final validation work for OPC1 and continuing manufacturing activities for OPERGEN. As additional support for our employees, we have made supplemental employee services available as may be needed. And in the meantime, we will continue to monitor the situation closely, and if needed, we will adjust our operations accordingly, but we expect we will be able to continue to operate our business as normal in both Israel and the U.S. Moving on to Oprygen, we were pleased to present last week at the Icelerator Conference in San Francisco in a session called Mapping the Future of Geographic Atrophy. There were more than 40 ophthalmology companies showcasing their innovations, but we were one of just four companies selected to share the main stage with Apellis and Iverica Stellis in front of a large audience of retinal specialists, investors, and other interested parties. It was wonderful to be recognized among the most promising approaches in the GA space, and I hope the replay from that presentation will be available soon for your review. As an additional part of our ongoing efforts to broaden awareness of the OPERGEN program, Roche and Genentech electively reported data last month from our Phase 1-2A clinical study at the 23rd EU Retina Congress. These latest results which were independently generated and reported by our partners, focused on the rapid time to onset of retinal structure improvements in Oprigen-treated patients, which are vastly faster than anti-complement approaches. You may have noticed that there has been a lot of attention recently drawn to the effects of complement inhibition during its third consecutive year of treatment, or as I prefer to call it, after 18 to 36 injections. Meanwhile, our data show that after just a single administration of Oprigen, improvements to retinal structure were detectable in some cases just days later and always within three months. As a reminder, all five patients who had extensive coverage of the GA lesion with the surgical bleb containing a suspension of Oprigen demonstrated evidence of improvement in outer retinal structure and visual acuity gains at 12 months. Additionally, maintenance or greater improvements in retinal structure were observed over time. These data continue to give us confidence in our lead asset, and we look forward to additional future clinical data updates on the OPERGEN program from our partners, Roche and Genentech, for both the fully enrolled Phase I-IIa study, which we conducted, as well as from Roche's Phase 2A study, which is currently enrolling. In parallel with these additional data announcements, we have continued inventing and patenting new process development methods to support long periods of exclusivity for our pipeline of cell transplant programs, including Oprogen. In September, the USPTO issued a patent entitled Large-Scale Production of Retinal Pigment Epithelial Cells. This patent, which has been exclusively licensed to lineage, has an expected expiration date of July 28, 2036, and we believe further enhances the value of the OPRGEN program. For reasons I've shared previously on several occasions, I'm unfortunately not yet able to provide any details about the results from the ongoing Phase 2A trial of OPRGEN. But patient enrollment continues. Data are being collected, and additional sites are expected to come online, which you can follow at clinicaltrials.gov. And while I'm not able to speak to when or where top-line data will be available, we understand that investors are eager to learn whether Roche can reproduce the clinical observations which Lineage reported from our Phase I-IIa study, and we aim to provide that information at our first possible opportunity. Moving next to OPC1, our spinal cord program, we remain on track to submit the IND amendment for the new delivery device before year end. The work we have been conducting recently is necessary to submit the IND amendment, which itself is a requirement to initiate our planned clinical safety study of the new spinal cord delivery device, which we licensed from NeurGain Technologies. Assuming submission of the INDA before year end, as we've planned, And if no FDA comments are received in the 30 days following that submission, that will permit us to bring OPC1 back into clinical testing by opening our first site and initiating this small safety study in subacute and chronic patients with either thoracic or cervical spinal cord injuries, presumably in Q1 of next year. In parallel with this work, we continue to be in contact with the California Institute for Regenerative Medicine regarding potential financial support for the OPC-1 program and specifically for this anticipated clinical trial. As I've shared before, we intend to apply for financial support for this study after we complete the 30-day waiting period or address any further requirements for our IND amendment as is consistent with CIRM guidelines. Moving next to ANP-1, We committed to providing an update before year end, and I'm happy to provide that update today. As a reminder, ANP1 is our cell transplant program being developed to address hearing loss, and we have been conducting preclinical testing of our ANP1 cells through a collaboration with the University of Michigan. Our initial objectives from this collaboration were to evaluate the delivery of our cells into specific target areas using standard surgical tools, to monitor initial engraftment of our cells into certain anatomical destinations, and to assess whether our cells survive after transplantation. We also wanted to see whether the cells migrated and if they were expressing certain markers of neuronal identity. The outcomes from this initial proof-of-concept work were both positive and encouraging, and we consider the results sufficient to advance this program into its next phase of preclinical development, which is to evaluate our ANP1 cells in a functional model of hearing loss. Two reasons why we're excited about reaching this milestone and proceeding into functional assessments are, first, the recent deal activity in the hearing loss space, which includes early stage assets, and second, clinical reports from gene therapy approaches to treat certain kinds of hearing loss. We believe cell therapy may have advantages over certain kinds of gene therapy insofar as replacing the entire cell means you don't have to select for patients who carry a specific genetic defect. We think this offers cell therapy larger addressable markets while matching the advantages of the one-and-done treatment schedule of gene therapy. And if we're able to demonstrate a functional signal in an animal model, that may create opportunities for business development or partnering of AMP1 if we determine that's the preferred path for us to pursue. I am also excited about the AMP1 program because it represents our flagship example of the speed and return on R&D investment which is possible with the lineage platform. We advanced from little more than a product concept into preclinical testing in less than 12 months and with an initial investment of less than $1 million. That is possible largely because the pluripotent cell lines which we start with are by definition capable of differentiating into every cell type of the human body. Once we figure out how to make the desired cell and can do so in a reproducible and scalable manner, we have essentially created a new pipeline asset. And while clearly this is an environment where capital raising is not cooperating with opportunities for rapid expansion, we will continue to try to find clever and affordable ways to extend our capabilities and unlock value in the months and years ahead. As a second example, of our efforts to create significant long-term value without large capital commitments, during this past quarter, we initiated certain development activities under our partnership with Eterna Therapeutics. This collaboration with Eterna is an example of our strategy of capitalizing on our extensive and proprietary process development capabilities by combining them with externally accessed cell engineering and cell editing technologies all for the purpose of creating novel and potentially superior product candidates. In the specific case of Eterna, we finalized the selection of edits for the initial iPSC cell lines being developed to reduce the immunogenicity of certain product candidates. And we additionally selected a particular edit intended to confer clinical differentiation and a competitive advantage in its applicable indication. And while we believe it is premature to disclose this program at this time, if we do reach predefined developmental milestones next year, we will look forward to sharing more details on this initiative with you. To wrap up, the biotech environment continues to be extraordinarily challenging. The sector is experiencing historic underperformance, and in some cases, even what appears to be positive news isn't being rewarded. But regardless, I believe lineage continues to be well-positioned to advance our business. Our commitment to financial discipline has helped us remain relatively stable for the past two years. And do I wish we could move faster? Of course. But capital comes with a cost, and sometimes it's better to reduce your pace of investment, such as when we made the strategic decision to divert the VAC2 program to more of a BD project instead of initiating a clinical study on our own. But the most important thing overall is that we've been able to keep moving forward in these difficult times. And I think our progress is demonstrated in our frequent business updates. And with our lead asset being advanced by Roche and Genentech, we believe lineage can offer shareholders an opportunity to reset expectations about what is possible in the treatment of geographic atrophy, which continues to represent an unmet need despite recent marketing authorizations from competing agents. So to summarize the three key points for today, one, the events in Israel have not had a material impact on our business. Two, we continue to be extremely happy with the relationship we have with Roche and Genentech, including their commitment to advancing Oprigen. And three, we are eager to complete the final steps for the OPC1 IND amendment this year so that we can have a second cell transplant program in active clinical development. And with that, I will hand the call to Jill for a discussion of our financials.